The Nigerian naira recorded a mixed performance across official and parallel markets this week, even as the country’s external reserves climbed closer to the $40 billion mark amid sustained foreign exchange inflows.
Data from the Central Bank of Nigeria (CBN) released on Wednesday showed that the naira weakened slightly at the official window, closing at ₦1,534.43 per dollar, compared to ₦1,533.10 on Tuesday. During intraday trading, the currency hit a high of ₦1,537.25, reflecting reduced liquidity in the absence of direct CBN intervention.
The local currency closed at ₦1,537 to the dollar, up from ₦1,533.50 in the previous session, even as FX inflows from open market operations helped ease some pressure on the market.
Despite its limited involvement in the official market in recent weeks, the CBN appears to be maintaining a level of stability without large-scale dollar sales to banks and authorized dealers. In the parallel market, however, the naira appreciated to ₦1,535 per dollar, supported by intermittent supply and cautious demand.
Volatility in the black market continues, fueled by seasonal demand, particularly from travelers seeking personal travel allowance (PTA). Banks have also reported a surge in PTA applications, further straining informal supply channels.
Nigeria’s gross external reserves rose to $39.814 billion as of Monday, driven by continued FX inflows that have persisted since the previous month. With oil prices relatively stable, analysts believe reserves could surpass the $40 billion threshold this week—bolstering the CBN’s capacity to manage currency pressures.
Looking ahead, analysts note that market direction in August will depend on key variables including oil prices, central bank FX strategies, and global investor sentiment. While stronger reserves and tight monetary policy could support stability, downside risks remain from potential declines in oil prices and broader global uncertainty.
Oil prices fell to an eight-week low following comments from former U.S. President Donald Trump suggesting progress in talks with Moscow, which cast doubt over the likelihood of new U.S. sanctions on Russia. Brent crude declined by 95 cents to $66.69 per barrel, while U.S. West Texas Intermediate (WTI) dropped 97 cents to $64.19.
In the precious metals market, gold prices eased as investors booked profits after recent gains. Spot gold dipped 0.39% to $3,368.01 per ounce, while U.S. gold futures fell 0.22% to $3,430.52. Market sentiment remains cautious as attention turns to Trump’s upcoming Federal Reserve nominations, the newly imposed U.S. tariff on India, and ongoing diplomatic developments between Russia and Ukraine.
